Queen’s gets ready to renovate hospital

Queen’s Medical Center-West Oahu will nearly double the capacity of its emergency and operating departments when it opens in Ewa in February 2014.

Plans are being finalized by parent company Queen’s Health Systems to begin renovations in the next few months on the former Hawaii Medical Center-West. Queen’s, which operates the main trauma center in the Pacific, expects to initially hire up to 400 mostly local workers as early as this summer to staff the only acute-care hospital in West Oahu.

The hospital will reopen with just 70 beds, though it is licensed for about 130. Queen’s said it will increase the number as demand grows.

St. Francis Healthcare System of Hawaii, operated by a Catholic religious order, first opened the Ewa hospital in 1990 with 136 beds. Before it was shuttered, HMC-West had 102 beds.

Queen’s completed its purchase of the facility from St. Francis on Dec. 14, a year after the bankrupt HMC-West abruptly closed, placing an immediate strain on the state’s emergency medical services and inundating other hospitals with West Oahu patients. HMC-East’s Liliha hospital closed in early January last year. Combined, 1,000 workers were left without jobs.

Queen’s is spending more than $70 million on the acquisition, renovations and new equipment.

Emergency rooms will almost double to 22, while operating rooms will expand to four from two. The hospital will have an intensive care unit as well as diagnostic imaging services, but no obstetrics and gynecology services.

“It’s certainly an undersized ER (before any renovations). We’re working with physician leaders to look at what services currently exist out there and what the needs may be,” Queen’s President Art Ushijima said in an interview Wednesday.

The company has hired Susan Murray to head the Ewa facility, the largest acquisition for Queen’s in recent history. Its last, in 1987, was of Molokai General Hospital, which has 15 beds.

Three days into the job, Murray, as chief operating officer, is already strategizing ways to keep costs down, including centralizing billing and information technology functions at Queen’s main base on Punchbowl Street.

“It will be centralized so we don’t need to add an entirely new department out there,” said Murray, who grew up in Honolulu and graduated from Punahou School and the University of Hawaii at Manoa.

“There’s a lot of infrastructure that exists at this campus that we won’t have to duplicate.”

In a regulatory filing with the state, Queen’s projected inpatient admissions to be 3,300 and emergency and outpatient visits to total 27,100 in the first year of operations. By the third year, admissions were forecast to grow to 3,500 and ER and outpatient visits to reach 29,400. It also estimated the Ewa hospital will provide more than $50 million annually in charity care, uncompensated or under­compensated care.

Queen’s said it would take five years for the hospital to become profitable, a goal both HMC and St. Francis struggled for in recent years largely due to a disproportionate number of patients covered by lower-reimbursed Medicaid, the health insurance program for low-income residents.

Queen’s said the demographics of West Oahu have changed in recent years as a growing number of young families with higher income and commercial insurance, which reimburses at rates higher than Medicaid, move to the region.

“If you look at the population of West Oahu, it’s not predominantly Medicaid,” Ushijima said. “There’s a fairly good distribution of commercial and government payers. HMC may have had a disproportional number of Medicaid patients, but the population actually has a broader mix.”

As part of the purchase agreement, Queen’s will abide by St. Francis’ ethical religious directives prohibiting certain procedures, Ushijima said.

In addition, he said the organization’s chances of success are better than its predecessors simply because of its bigger staff and relationships in the community.

“We have a larger medical staff compared to what HMC or St. Francis had. There’s significant interest among physicians who would like to establish services in West Oahu. That’s one of the key things,” Ushijima added. “There’s expertise from the medical center that we can certainly provide that may not have been there before. There’s been significant community interest in reopening that hospital. I would anticipate the community wants the hospital to be successful so there’s going to be active interest in supporting the hospital.”

When asked why Queen’s didn’t buy the hospital before it closed, Ushijima said it wasn’t feasible since bankrupt HMC was embroiled in legal issues.

The Franciscan sisters sold the hospitals in January 2007 for $68 million to HMC LLC, then a for-profit joint venture between Hawaii Physician Group LLC, made up of 130 local doctors, and Kansas-based Cardiovascular Hospitals of America.

HMC first filed for Chapter 11 bankruptcy protection in August 2008. It emerged in August 2010 and became a nonprofit organization before filing its second bankruptcy in June 2011.

The hospitals were returned to St. Francis, HMC’s largest secured creditor, in May.

Meanwhile, Queen’s has reopened the only organ transplant center in the Pacific and a liver center formerly operated by HMC. It is still reviewing the feasibility of resuming bone marrow transplants, a service lost when HMC-East in Liliha shut down.

Ushijima said Queen’s has expressed interest in operating the Liliha campus, but at this point is focusing on reopening the Ewa hospital.

“The Queen’s Health Systems is such a strong presence,” Murray said. “There’s a proven mission of excellence that we have here. This will now be another opportunity with another hospital opening in West Oahu. My goal is to make sure when the doors open and you walk inside, it will have the look and feel of the Queen’s Medical Center.”